The much-conferred sector of business process outsourcing is simply an extension of services to enhance performance and hence market value of the firm. There are humongous benefits of employing these support services to the back office operations of your organization. The support service takes care of the non-core activities of the corporate world as the core area. Integral functions such as maintaining a high level of product quality and improving trade efficiency while minimizing the costs are managed by the BPO companies. They also serve enormously in the following spheres-

  • E-logistics
  • Software and IT services
  • Data processing
  • HR services
  • Revenue accounting
  • Legal process and other zones

This step, taken in the interest of national economy is a significant thoughtful and testified strategy. It builds and maintains strong customer relationships. Let us explore the framework of the mechanism involved in this system-

Idea behind the initiative

Third party service provision: This is the main thought behind the inception of BPO companies. The motto is to enhance the standards of the offered facilities by enrollment of an external aid. The assistance delivered by this support system saves the firm from additional expenses of hiring, training, organizing, paying the agents and setting up new technologies to back the tasks.

Classification

  • Back office outsourcing: It includes the contracting of internal operations such as Data entry, application processing, accounting, invoice generation, retail, e-commerce and the other indirect services.  
  • Front office outsourcing: It revolves around utilities such as call centre services, technical support, market researching, managing inbound and outbound sales, appointment scheduling and other work which deal with direct contact with the customers.
  • On-shore services: This sub-division connects with another company within the same country to exchange solutions. It is a method to promote cost-effectiveness and mutual upgradation. Its advantages include no language and cultural boundaries, high skilled employees and reduced labor costs.
  • Nearshore BPOs: This involves companies that outsource to the firms located in the nearby countries having negligible variation in dialect and lifestyle. These BPOs encourage cost-savings, frequent site landings and a large number of leads.
  • Offshore outsourcing: This is expanding your business internationally. When one company delegate their business operations to BPO companies situated in foreign countries with different cultures and traditions, it is called offshore outsourcing.

Verticals and Horizontals of a BPO

This is more of an administrative division of the companies rather than their physical categorization. The outsourcing processes constitute the separation of activities in two ways:’

  • Vertical division

It has distinctive departments from top to bottom which provide functional services. It has limited domains of specialization at a mature stage of the market such as- Healthcare division, manufacturing processes, financial, auditing and retail services.

  • Horizontal division

These sections offer task-specific services. They are initiated at an early stage of the market. The vendor juggles with a number of domains such as- Human Resource department, payroll progression, taxation solutions and data processing support.

The 5 business models

  • Blended outsourcing model

It is an amalgamation of both on-site and off-site resources. It covers all the types of national and international BPO companies. It is a “Global Delivery Model” which bonds with the maximum number of partners at minimum prices, best manpower and optimum assets. This model is best suited for places that are prone to natural calamities. It helps to stop any interruptions or halts and ensures an instant direction of work to a different branch.

  • The Dual-shore model

The second one is commonly known as the “Hybrid Model” as it enforces a combination of both the in-house and off-premise teams. 80% of the tasks are completed by the local agents and remaining 20% is assigned to the external support team.

  • Hub-and-spoke model

The next prototype is based on off-shore multi-sourcing. It engages a number of suppliers from overseas. It eliminates the trouble due to single monopoly support. The ‘first train, then employ’ method is used to run the system smoothly.

  • The BOT model

Next is the Build-Operate-Transfer procedure in which the client hires an offshore firm. This firm builds an outsourcing subordinate and takes care of its operations. Then it transfers the freehold of the firm back to the client.

  • The offshore in-sourcing model

The last model deals with the captive centres. This is also known as “Global shared service model”. It produces large internal service scope with sure-shot markets. These centres have least issues of control and can be treated as free entities.

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